The trend ratio of compensation of employees to total factor income (the wages share) was at its lowest point in the last 10 years in the June quarter 1993, when it stood at 53.0%. By December quarter 1996 the ratio had risen to reach 55.3%, its highest level for the 1990s. The ratio in June quarter 2002 was 53.3%. Movements in the trend ratio of gross operating surplus for financial and non-financial corporations to total factor income (the profits share) tend to be inverse to the movements in the wages share as wages and corporate profits are the two major components of total factor income. The profits share recorded its highest value during the last 10 years of 24% in the September and December quarters 1993, and in the June quarter 2002.

GROSS DOMESTIC PRODUCT, Current Prices - Annual

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

$m

$m

$m

$m

$m

$m

Final consumption expenditure

410,738

436,433

463,164

492,750

527,787

559,494

Gross fixed capital formation

Private

95,038

108,724

112,828

123,899

115,875

128,503

Public

22,551

20,748

24,876

25,154

25,825

27,982

Domestic final demand

528,326

565,905

600,868

641,803

669,487

715,979

Changes in inventories

-10

62

5,152

1,760

1,873

1,320

Gross national expenditure

528,316

565,967

606,020

643,563

671,360

717,299

Exports of goods and services

105,160

113,744

112,025

125,972

153,511

152,219

less Imports of goods and services

103,590

118,482

126,453

140,323

152,636

154,194

Statistical discrepancy (E)

0

0

0

0

0

649

Gross domestic product

529,886

561,229

591,592

629,212

672,232

715,973

Compensation of employees

257,968

268,912

287,086

302,312

322,049

337,381

Gross operating surplus

161,658

176,833

181,186

196,137

206,021

221,446

Gross mixed income

48,500

50,929

53,590

57,666

61,156

68,345

Total factor income

468,126

496,674

521,862

556,115

589,226

627,172

Taxes less subsidies on production and imports

61,760

64,555

69,730

73,094

83,005

88,193

Statistical discrepancy (I)

—

—

—

—

—

608

Gross domestic product

529,886

561,229

591,592

629,212

672,232

715,973

MEMORANDUM ITEM

Average compensation per employee (14)

36,422

37,435

38,909

40,068

41,572

43,069

Source: Australian National Accounts: National Income, Expenditure and Product (5206.0).

Explanatory Notes

The gross domestic product account is a consolidated summary account of all the production activity which takes place in Australia. It records the incomes generated in the production process and the value of final goods and services produced.

On the expenditure side the gross domestic product account records sales of goods and services (including goods produced for own use) to final domestic consumers, gross fixedcapital formation, changes in inventories and exports minus imports.

The income side of the gross domestic product account shows compensation of employees (wages and salaries paid to employees for producing goods and services), gross operating surplus (the income of corporations,general government and dwellings owned by persons from production), gross mixed income (the income of unincorporated enterprises from production) and taxes less subsidies on production and imports paid to general government.

The gross domestic product account is analogous to accounts used in business accounting and is, in effect, a consolidation of the trading accounts of individual enterprises from all sectors.